Indexation and equalisation of GMP in public service pension schemes
Read the full outcome
Detail of outcome
皇冠体育app government is announcing its response to the consultation on guaranteed minimum pension (GMP) indexation and equalisation in public service pension schemes. 皇冠体育app government consulted between 28 November 2016 and 20 February 2017.
This consultation was about how government should continue to meet its obligations to index (price protect) and equalise (make equal payments to men and women) the pension entitlements of a certain group of public servants with an occupational pension known as a GMP.
This consultation received 62 responses, broadly in favour of the government鈥檚 objectives in continuing to ensure the GMP continues to be indexed and equalised. 皇冠体育app government has been implementing an 鈥渋nterim solution鈥� between 6 April 2016 and 5 December 2018. 皇冠体育app outcome of this consultation is that this solution will be extended for a further two years and four months. This will cover those members of public service schemes with a GMP who reach state Pension Age on or after 6 December 2018 and before 6 April 2021.
During this period, the government will investigate the possibility of an alternative long-term methodology, known as 鈥渃onversion鈥�.
Original consultation
Consultation description
On 6 April 2016 the government introduced the new State Pension (nSP), designed to radically simplify pension provision, while ensuring that pensioners have security in retirement. Among the layers of complexity that are being removed is the Additional State Pension (AP) 鈥� a complex earnings related element of the old state system.
With the removal of the AP the government needs to consider how public service pension payments for a group of members should be increased in future. Specifically those who have accrued a guaranteed minimum pension (GMP) and reach State Pension age after 5 December 2018. If the government does not take action, an inequality in the payment of public service pensions between men and women may be introduced.
皇冠体育app government is today publishing a consultation on how best to treat GMPs for affected members of public service pension schemes. 皇冠体育app consultation considers various options for addressing the issues of equalisation and indexation of the nSP reforms.
皇冠体育app government is separately consulting on a method by which private sector pension schemes can address the inequalities inherent in private pensions as a result of GMPs. While this consultation may be appropriate for private sector employers, the government does not consider this an appropriate method for public service pension schemes to meet their indexation and equalisation obligations.
Affected members of the public and interested bodies are invited to respond to the consultation. 皇冠体育app government will carefully consider the responses before announcing a policy decision.
Documents
Updates to this page
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Updated with the consultation response.
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First published.